In this episode of the Managing Uncertainty Podcast, Bryghtpath Principal & Chief Executive Bryan Strawser discusses the top 4 Business Disruptions that you should be preparing for in 2022.
Related Episodes & Blog Posts
- Blog Post: 4 Top Business Disruptions to Plan for in 2022
- Blog Post: Business Continuity Awareness – Why It’s Important
- Episode #110: Is your BC Program ready for the next disruption?
- Episode #124: Business Continuity Standards – Which is right for you?
- Episode #125: What is resilience?
Hello and Welcome to the Managing Uncertainty podcast. This is Brian Strawser, Principal and Chief Executive here at Bryghtpath. And we’re well into 2022 at this point, and I want to talk about four top business disruptions that you should be planning for as 2022 evolves.
As we saw in the last half of 2021, there’s been a resurgence in economic activity around the world due to monetary and fiscal stimulus, increased consumer spending, increased confidence, but supply chain challenges, rising price pressure, and lingering concerns about COVID have increased inflation. Many pundits predict that 2022 might present several disruptions that could interfere with your ability to conduct business. So here are four disruptions to plan for in 2022.
The first is the unrelenting threat of COVID-19. Experts predict that the pandemic will persist for longer than we expect it. Even though there’s improved awareness and vaccines that are now available, the threat is still high due to low vaccination rates globally. With the emergence of new strains of the virus, the latest being Omicron, and higher caseloads even in industrialized countries, there’s no sign the situation will improve in 2022. Reports indicate that new strains may be more transmissible and more resistant to treatment. With highly dysfunctional health challenges as observed at the height of COVID-19, there’s a lot of uncertainty about how the situation will unfold this year.
There’s also uncertainty concerning the vaccine’s effectiveness in dealing with new, emerging variants. Even though we may not witness new lockdowns or stay-at-home orders, the disruptions caused by the pandemic will persist due to restricted movement and delayed return to work by employees. But this interference may not as be as severe as we previously witnessed. That’s because many foreign trade partners have also recorded a significant number of vaccinations and may not need to resort to lockdowns or travel restrictions. It’s advisable, as you plan, to imagine the worst-case scenarios. It’s better to be overprepared in the case of COVID than to be caught flat-footed when interferences with your business continuity plans and scenarios soar.
The second challenge facing us this year, supply chain disruptions. There’s a lot of factors affecting supply chain logistics. There’s been a labor shortage in key sectors, such as manufacturing and shipping. The lockdowns and movement restrictions we’ve seen saw many people have to stay at home. The situation has not normalized globally, and experts predict it may persist well into 2022 or even worsen. There’s a swell in the number of young workers as aged, skilled, and experienced workers opt to retire because of the threat of the pandemic. With a young, inexperienced workforce, we have a skill gap. Many technical colleges have not been in operation since the onset of the pandemic, so we’re lacking graduates that may have the technical skills the companies need.
All of this affects the quality of goods and services that are on offer. For instance, in the shipping sector, young truck drivers with young families might not commit as much time as older ones. This means shipping companies need more drivers. Young truck drivers are also more likely to have accidents than experienced drivers. If there are no additional drivers to hire, companies reduce the goods they haul in their trucks. In this end, this affects the volume of goods and supply and the time it takes to receive those goods. As you plan for the coming year, expect a shortage or delay in the shipment of critical goods.
The shortage of raw materials can also affect the supply chain. Many manufacturers are relying on just-in-time shipping to haul their materials. A slowdown in the shipment sector means a delay in the manufacturing and shipment of finished products. The supply chain will be affected further by ongoing deglobalization with economies opting to meet the demands of their local markets before they ship abroad. The economic conflict between the U.S. and China will also endure and will affect the supply of goods in 2022.
The third scenario to consider in the coming year, increased cyber threats. The pandemic saw a spike in business shifting online and increased technology-based transactions. Projections show that there is also heightened cyber threats. Hackers have targeted companies depending upon technology to connect with their remote teams. In the coming year, cybercriminal activities will likely swell, targeting companies that are using outdated cybersecurity tools that are inadequate to protect their systems.
As businesses suffer other crunch owing to difficult economic times occasioned by the pandemic and the inflation we currently see throughout the world, they might lag in upgrading their cybersecurity barriers that expose them to attacks. And as workers return to work, they may unknowingly expose businesses to cyber-attacks. Remote workers were, in many cases, inadequately trained on cybersecurity because companies were unprepared for work-from-home arrangements. As they bring the gadgets and tools they were using at home into the office, they may introduce malware that upsets your business continuity capabilities.
Cybercriminals are also targeting company data to use it to demand ransom payments. We expect this to continue in the coming year as more criminals join into this type of activity. Even though the Biden administration has shown a strong commitment to fighting cybercrime, countries suspected of hosting these criminals will likely not cooperate due to icy diplomatic relations and rogue state situations between them and the United States.
You also should not rule out insider threats, that is workers that are colluding with cybercriminals to compromise your systems for monetary gains. In the recent past, hackers have increased the use of stolen data to extort money from businesses. As these practices become lucrative, hackers may lure your employees to the crime for a share of the paid ransom windfall.
Lastly, there’s going to be a labor shortage and a demand for higher wages. And we’ve already seen this in the global economy. The skilled, experienced, and aged labor force has, in many cases, opted to retire, whether that’s driven by coronavirus or change in benefits or what have you. A lot of businesses laid-off workers or furloughed workers and then the economy opened up, they are looking for people to hire. And there is stiff competition for that limited talent pool, especially people who have critical skills. This shortage in labor will see the demand for higher wages increase. This will raise the cost of labor as the workers who need better working conditions work to safeguard their health.
To retain older, skilled employees, you need to offer them more premium pay and benefits. That may lead to increased wages for unskilled workers as well as you try to bridge the wage gap among your employees. Companies might pay higher for health insurance to attract top talent. You may also experience higher employee turnover rates as you compete for this dwindling talent.
Tight immigration policies in the U.S. will further affect the supply of labor. Considering technical college degrees training programs were disrupted during the pandemic, the number of skilled graduates on the market is also diminishing. You should plan to spend more time training your workers on industry-specific skills after hiring them.
In our experience, organizations with a strong business continuity and crisis program have weathered the storm and protected their business throughout the turmoil of the past two years. We can help your organization ensure that you have the right program in place for the coming year. Learn more about our capabilities at bryghtpath.com or contact us today.
That’s it for this edition of the Managing Uncertainty podcast. We’ll be back next week with another new episode. Be well.